United States District Court, W.D. North Carolina,

Asheville Division.

Pasquale RICCI and wife, Kathy Ricci, Plaintiffs,

v.

SUPERIOR MOVING & STORAGE, INC., Defendant.

Civil No. 1:08CV274.

Oct. 7, 2008.

ORDER OF DISMISSAL

LACY H. THORNBURG, District Judge.

THIS MATTER is before the Court on the Magistrate Judge’s Memorandum and Recommendation, filed September 12, 2008.

Pursuant to 28 U.S.C. § 636(b) and the standing Orders of Designation of this Court, United States Magistrate Judge Dennis L. Howell, was designated to consider pending motions in the captioned civil action and to submit to this Court recommendations for the disposition of these motions.

On September 12, 2008, the Magistrate Judge filed a Memorandum and Recommendation in this case containing proposed findings of fact and conclusions of law in support of a recommendation regarding Defendant’s motions to dismiss and for change of venue. The Plaintiffs, who are proceeding pro se, and counsel for the Defendant were advised that any objections to the Magistrate Judge’s findings were to be filed in writing within 10 days of service of the Recommendation; the period within which to file objections expired on September 29, 2008. No written objections to the Memorandum and Recommendation have been filed.

After a careful review of the Magistrate Judge’s Recommendation, the Court finds that the proposed findings of fact are supported by the record and that the proposed conclusions of law are consistent with current case law. Accordingly, the Court hereby accepts the Magistrate Judge’s Recommendation that the Defendant’s motion to dismiss be allowed and the Plaintiffs’ action dismissed with prejudice.

IT IS, THEREFORE, ORDERED that the Defendant’s motion to dismiss is ALLOWED, and Plaintiffs’ claims are hereby DISMISSED WITH PREJUDICE as preempted by the Carmack Amendment to the Interstate Commerce Act, 49 U.S.C. § 14706.

IT IS FURTHER ORDERED that the Defendant’s motion to change venue is DENIED as moot.

MEMORANDUM AND RECOMMENDATION

DENNIS L. HOWELL, United States Magistrate Judge.

THIS MATTER is before the court upon defendant’s Motion to Dismiss Complaint (# 5). Also pending is defendant’s Motion to Change Venue (# 4). Plaintiffs are proceeding without counsel.

I. Dismissal for Procedural Default

On July 7, 2008, the undersigned entered a Roseboro Order advising the pro se plaintiffs that a motion to dismiss had been filed under Rule 12(b)(6), Federal Rules of Civil Procedure, and explained that such rule provided for dismissal where a party has failed to state a cause of action as a matter of law. The court further explained that defendant had specifically argued that their claims were preempted under the Carmack Amendment to the Interstate Commerce Act, 49 U.S.C. § 14706. Plaintiffs were advised that they had until July 21, 2008, to file a written response to defendant’s motion. Plaintiffs were further advised that their legal interests would best be protected through hiring an attorney to assist them. Upon motion, plaintiffs were allowed additional time to respond, up to and including August 22, 2008.

On August 22, 2008, plaintiff Kathy Ricci filed what she captioned as a Motion to Dismiss Without Prejudice. In such motion, such plaintiff stated as follows:

Due to medical and household economy reasons, a request to file and continue at a latter time is needed. Not to exceed 1-year term from this date.

Docket Entry # 10, at 1 (errors in the original). In response to such motion, which was not signed by plaintiff Pasquale Ricci, the court entered an Order as follows:

Ms. Ricci is advised that this court has no authority to enlarge any deadline for the filing of a civil action, known as a “statute of limitations” deadline. It is up to plaintiff to determine when a statute of limitation is to run. Further, if plaintiff desires to take a voluntary dismissal of her action without prejudice, she may do so under Rule 41(a)(1)(A), Federal Rules of Civil Procedure, at any time prior to defendant filing an answer of moving for summary judgment by filing a “notice of dismissal without prejudice.” Inasmuch as there are two plaintiffs in this matter, both plaintiffs would need to sign the notice for the entire case to be voluntarily dismissed. Finally, plaintiff is advised that if she has previously dismissed this action, a second dismissal would operate as an adjudication on the merits. Fed.R.Civ.P. 41(a)(1)(B). Plaintiffs are again advised that they need the assistance of counsel in this matter inasmuch as important legal rights are at stake.

The court will deny plaintiff’s Motion to Dismiss without prejudice as it seeks relief that this court cannot grant as a matter of law. Plaintiffs will be allowed until September 5, 2008, to either respond to defendant’s Motion to Dismiss or file a notice of voluntary dismissal signed by both plaintiffs. Plaintiffs are advised that such a dismissal may operate as an adjudication on the merits if these claims were previously dismissed or if the statute of limitations has already run.

Order, Docket Entry # 11. Despite again enlarging the deadline for the filing of response or a proper Rule 41 notice of dismissal, plaintiffs have filed no response to the defendant’s Motion to Dismiss. Thus, the undersigned must respectively recommend that the Motion to Dismiss be allowed and that plaintiffs’ Complaint be dismissed with prejudice based on such default in responding.

II. Dismissal of the Complaint as Preempted

In an abundance of caution, the undersigned has also considered the substance of defendant’s motion, which seeks dismissal under Rule 12(b)(6) for failure to state a cognizable claim inasmuch as such claims are preempted under the Carmack Amendment.

A. Standard Applicable to Rule 12(b)(6) Motions

Where a defendant contends that a plaintiff has failed to state a cognizable claim, Rule 12(b)(6) authorizes dismissal based on a dispositive issue of law. Neitzke v. Williams, 490 U.S. 319, 109 S.Ct. 1827, 1832 (1989); Hishon v. King & Spalding, 467 U.S. 69, 73 (1984); Conley v. Gibson, 355 U.S. 41 (1957). As the Court discussed in Neitzke:

This procedure [for dismissal], operating on the assumption that the factual allegations in the complaint are true, streamlines litigation by dispensing with needless discovery and fact finding. Nothing in Rule 12(b)(6) confines its sweep to claims of law which are obviously insupportable. On the contrary, if as a matter of law “it is clear that no relief could be granted under any set of facts … a claim must be dismissed, without regard to whether it is based on outlandish legal theory…. What Rule 12(b)(6) does not countenance are dismissals based on a judge’s disbelief of a complaint’s factual allegations.”

Id., at 1832 (citation omitted). Dismissal of a complaint is proper under Rule 12(b)(6) where it is clear that no set of facts consistent with the allegations in the plaintiffs’ complaint could support the asserted claim for relief. Taubman Realty Group LLP v.. Mineta, 320 F.3d 475, 479 (4th Cir.2003); Migdal v. Rowe Price-Fleming Intl Inc., 248 F.3d 321, 325-36 (4th Cir.2001).

While the court accepts factual allegations in the complaint as true and considers the facts in the light most favorable to a plaintiff in ruling on a motion to dismiss, a court “need not accept as true unwarranted inferences, unreasonable conclusions, or arguments.”  Eastern Shore Mkt.’s Inc. v. J.D. Assoc.’s, LLP, 213 F.3d 175, 180 (4th Cir.2000).

The presence of a few conclusory legal terms does not insulate a complaint from dismissal under Rule 12(b)(6) when the facts alleged in the complaint cannot support the legal conclusion. And although the pleading requirements of Rule 8(a) are very liberal, more detail often is required than the bald statement by plaintiff that he has a valid claim of some type against defendant. This requirement serves to prevent costly discovery on claims with no underlying factual or legal basis.

Migdal, at 326 (citations and internal quotations omitted). In addition, a court cannot “accept as true allegations that contradict matters properly subject to judicial notice or by exhibit .”  Venev v. Wyche, 293 F.3d 726, 730 (4th Cir.2002) (citations and internal quotations omitted). For the limited purpose of ruling on defendants’ motion, the court has accepted as true the facts alleged by plaintiffs in the Complaint and as represented in the Response, and has viewed them in a light most favorable to plaintiffs.

B. Discussion

Resolution of this dispute between plaintiffs and a household moving company is governed by the Carmack Amendment to the Interstate Commerce Act.49 U.S.C. § 14706. All of plaintiffs claims in the complaint sound in state tort and contract law. As a matter of well settled law, the Carmack Amendment preempts all of plaintiffs’ state law claims inasmuch as this action arises exclusively from interstate transport services performed by defendants. As recognized by the United States Supreme Court in Missouri Pacific R.R. Co. v. Elmore & Stahl, 377 U.S. 134 (1964), the Carmack Amendment replaced varying state causes of action with uniform “strict liability” of carriers to shippers. To assert a prim facie case under the Carmack Amendment, all that a shipper need prove are: (1) that their goods were in good condition when delivered to the carrier; (2) the good were not delivered or delivered damages; and (3) damages in the amount of “actual loss.” Id., at 138.Accordingly, the Carmack Amendment completely preempts all state law remedies for damage or loss of goods transported in interstate commerce. Shao v. Link Cargo(Taiwan) Ltd., 986 F.2d 700 (4th Cir.1993). Plaintiffs have not asserted such a claim in their Complaint.

Thus, the only possible claim against an interstate motor carrier for loss or damage to goods during or as part of an interstate shipment of household good is a claim under the Carmack Amendment. Review of the allegations of the Complaint make it clear that the damage or loss of plaintiffs’ household goods in an interstate shipment by motor carrier is the basis of all of their claims. The Carmack Amendment also applies to damage or loss that may have occurred when defendants stored plaintiff’s household goods. Margeston v. United Van Lines, Inc., 785 F.Supp. 917, 920 (D.N.M.1991); I.C.R.R. § 1056.12.

Preemption of the state law in such situations is well recognized in the district. As succinctly summarized by Honorable Graham C. Mullen, then Chief Judge of this court, the Carmack Amendment preempts all state law claims:

Circuit courts of appeals, including the Fourth Circuit, have also unanimously held that Carmack’s broad scope preempts all state law claims, whether they contradict or supplement Carmack remedies. Rini v. United Van Lines, Inc., 104 F.3d 502, 506 (1st Cir.), cert. denied, 522 U.S. 809, 118 S.Ct. 51, 139 L.Ed.2d 16 (1997) (“Preempted state law claims, therefore include all liability stemming from damage or loss of goods, liability stemming from the claims process, and liability related to the payment of claims.”);   Cleveland v. Beltman North American Van Lines Co., Inc., 30 F.3d 373, 379 (2d Cir.1994) (stating that one of the primary purposes of the Carmack Amendment is to provide uniformity in the disposition of claims brought under a bill of lading); Shao v. Link Cargo (Taiwan) Limited, 986 F.2d 700, 706-707 (4th Cir.1993) (“[I]f the Interstate Commerce Commission had jurisdiction over the shipment in this case, Shao’s common law claims are preempted by the Carmack Amendment.”); Moffit v. Bekins Van Lines Co., 6 F.3d 305, 306-7 (5th Cir.1993) ( Carmack Amendment preempted state law claims, including claims of misrepresentation, fraud, gross negligence and intentional and negligent infliction of emotional distress); Hughes Aircraft Co. v. North American Van Lines, 970 F.2d 609, 613 (9th Cir.1992) (“Hughes [the shipper] wisely concede [d] that federal law preempts any state common law action against … a common carrier.”). Underwriters at Lloyds of London v. North American Van Lines, 890 F.2d 1112, 1120 (10th Cir.1989) (“[T]he Carmack amendment preempts state common law remedies against a carrier for negligent loss or damage to goods shipped under a proper bill of lading.”); Hughes v. United Van Lines, Inc ., 829 F.2d 1407, 1415 (7th Cir.1987) (“We … hold that the remedy provision of the Carmack Amendment preempts all state and common law remedies inconsistent with the Interstate Commerce Act …”); W.D. Lawson & Co. v. Penn. Central Co., 456 F.2d 419, 421 (6th Cir.1972) (“As to the … issue … [of] whether or not the Carmack Amendment preempted common law suits … we hold that it did.”)

Taylor v. Mayflower Transit, Inc., 22 F.Supp.2d 509, 510-511 (W.D.N.C.1998). The undersigned is compelled to recommend to the district court that all of plaintiffs’ state law claims be dismissed with prejudice.

RECOMMENDATION

IT IS, THEREFORE, RESPECTFULLY RECOMMENDED that

(1) the Motion to Dismiss (# 5) be ALLOWED due to plaintiffs’ default in failing to properly respond within the time allowed, and that the Complaint be dismissed with prejudice; and, in the alternative

(2) the Motion to Dismiss (# 5) be GRANTED in its entirety, and that all claims asserted herein be DISMISSED with prejudice as PREEMPTED by the Carmack Amendment; and

(3) the Motion to Change Venue (# 4) be DENIED as moot.

The parties are hereby advised that, pursuant to 28, United States Code, Section 636(b)(1)(C), written objections to the findings of fact, conclusions of law, and recommendation contained herein must be filed within ten (10) days of service of same. Failure to file objections to this Memorandum and Recommendation with the district court will preclude the parties from raising such objections on appeal. Thomas v. Arn, 474 U.S. 140 (1985), reh’g denied, 474 U.S. 1111 (1986); United States v. Schronce, 727 F.2d 91 (4th Cir.), cert. denied, 467 U.S. 1208 (1984).

District Court of Appeal of Florida,Second District.

FREEBURG ENTERPRISES, INC., Appellant,

v.

TRANSPORTATION CASUALTY INSURANCE CO., n/k/a AequiCap Insurance Co .; Ryan Dalby; Dale Locke; Chavez Auto Transport, Inc.; and Edvardo Macias-Castan, Appellees.

No. 2D07-3554.

Oct. 8, 2008.

NORTHCUTT, Chief Judge.

Transportation Casualty Insurance Company (TCI) sought a judgment declaring that it was not obligated to provide coverage after an accident involving a driver for its insured, Freeburg Enterprises, Inc. Following a bench trial, the court ruled in TCI’s favor. It determined that there was no coverage because Freeburg failed to have its employee approved by TCI before allowing him to drive. We reverse the judgment in part because Freeburg’s failure did not entirely deprive it of coverage under the policy.

Freeburg is an auto transport company. In mid-2003, it purchased a commercial lines policy from TCI. The policy included an endorsement  that amended the section on liability coverage. In pertinent part, its definition of “Who is an insured” provided that only drivers listed on the application schedule as of the date the policy began were covered. Further, under paragraph B, “[n]o coverage will apply to any driver newly placed in service after the policy begins until you report that driver to us and we advise you in writing that he/she is acceptable to us and that he/she is covered under the policy.”Thus, Freeburg was required to obtain TCI’s approval before adding a driver who had not been listed at the inception of the policy. However, paragraph D of the endorsement provided: “Not withstanding the foregoing, we will pay up to $10,000 in property damage and no fault benefits as required by Florida Law.”

Amendatory Endorsement, Truckers Coverage Form (TCI TRK 010).

Ryan Dalby had worked for Freeburg several times over the years, but he was not employed there when the policy was issued. He rejoined the company several months later. While driving for Freeburg, Dalby was involved in an accident.

TCI subsequently filed an action for declaratory relief, seeking a determination that there was no coverage for Dalby’s accident because Freeburg allegedly violated the policy’s requirement to obtain preapproval for him to drive. Freeburg filed a counterclaim for breach of contract. The evidence and argument at the bench trial focused for the most part on whether the insurance broker who sold the policy was the apparent agent for TCI and whether TCI was estopped from denying coverage because Freeburg allegedly called the broker to add Dalby as a driver. The court resolved both issues against Freeburg, and these rulings are not challenged on appeal. Rather, the issue before us is the proper interpretation of the endorsement’s paragraph D, quoted above.

When construing a contract of insurance, we must apply the plain language of the policy. Swire Pac. Holdings, Inc. v. Zurich Ins. Co., 845 So.2d 161 (Fla.2003) (stating guiding principle to construe insurance contracts according to plain language of policy). Giving effect to the plain meaning of the phrase “notwithstanding the foregoing,” paragraph D can only be read as a waiver of the preceding provisions to the limited extent of the coverage described in the paragraph. Thus, even if Freeburg’s driver had not been preapproved as required by paragraph B, paragraph D afforded coverage for up to $10,000 in property damage and no fault benefits “as required by Florida Law.”

TCI hangs its hat on this last phrase. It acknowledges that Florida law requires every policy containing personal injury protection (PIP) coverage to afford at least $10,000 in property damage coverage, per section 627.7275, Florida Statutes (2003), and that the Freeburg policy contained PIP coverage. Even so, TCI maintains that the $10,000 property damage coverage was not “required by Florida Law” in this case, owing to the last sentence of the statute: “The policy, as to coverage of property damage liability, shall meet the applicable requirements of s. 324.151, subject to the usual policy exclusions such as have been approved in policy forms by the office.”  § 627.7275 (emphasis supplied). According to TCI, the requirement that Freeburg have its drivers preapproved was a “usual policy exclusion” that excused the policy from the statutory requirement. Thus, it contends, the $10,000 in property damage and no fault benefits referenced in paragraph D were not “required by Florida Law.”

TCI’s reliance on the statutory language is misguided. Even if we were to assume that the policy’s driver preapproval provisions are “usual policy exclusions” as contemplated by the statute, attributing that meaning to the “required by Florida Law” phrase in paragraph D would render the entire provision ambiguous. In the course of one sentence, it would both waive the driver preapproval requirement for purposes of the coverage referenced therein and enforce the very same requirement in order to deny the very same coverage. Under established principles of construction, we must avoid an interpretation that deprives a contract provision of any purpose. See  Excelsior Ins. Co. v. Pomona Park Bar & Package Store, 369 So.2d 938, 941 (Fla.1979) (noting that “[e]very provision in a contract should be given meaning and effect”). And the very ambiguity inherent in TCI’s interpretation of paragraph D means that we must construe it in favor of Freeburg. See  Swire Pac. Holdings, 845 So.2d at 165 (stating that language susceptible to more than one meaning is ambiguous and strictly construed against the drafter).

The more reasonable interpretation of paragraph D is that the driver preapproval requirement is disregarded for all purposes within the ambit of that provision and that the property damage and no fault benefits described therein are payable if they are otherwise required by law. Under the facts of this case, those benefits are payable because the policy includes PIP coverage. § 627 .7275.

Finally, we reject TCI’s several arguments to the effect that Freeburg waived this issue. As the plaintiff seeking a declaration that its insurance policy afforded no coverage for the accident, TCI had the burden of proof. See  City of Miami Beach v. New Floridian Hotel, Inc., 324 So.2d 715, 717 (Fla. 3d DCA 1976). TCI introduced a policy reflecting that there was $10,000 in coverage notwithstanding Freeburg’s failure to obtain preapproval of the driver. Simply put, TCI failed to demonstrate that there was no coverage when the evidence showed that there was limited coverage.

The trial court erred in finding no coverage. Accordingly, we reverse and remand for the trial court to enter an amended final judgment declaring that there was $10,000 in coverage for the accident at issue.

Reversed and remanded.

SILBERMAN, J. and CANADY, CHARLES T., Associate Judge, Concur.